Therapeutics · Substance use disorder
EncepHeal Therapeutics
A Winston-Salem startup that licensed a compound library from the National Institute on Drug Abuse and spent about $794,000 of federal money hunting a medicine for cocaine use disorder. The work reached monkeys, not patients.
Two switches
Four male rhesus macaques sat in front of two switches. One delivered a food pellet. The other delivered cocaine, at unit doses that climbed across the session. Each animal had been self administering cocaine for more than two years, and each drew the same curve every day: food when the cocaine on offer was weak, cocaine when it was strong. The question was whether a new compound could bend that curve back toward the food.
The study ran at Wake Forest and was published in the Journal of Pharmacology and Experimental Therapeutics in March 2023. Its first author was Omeed Rahimi, chief science officer of EncepHeal Therapeutics. The disclosure line reads: “O.R. and S.R.C. held executive roles at EncepHeal Therapeutics, Inc. while conducting these studies.”
It was the closest the company got to a clinical answer, and the answer was mixed.
A field with nothing on the shelf
Cocaine use disorder has no approved medicine. The CDC, reporting in August 2025 on stimulant involved overdose deaths, noted that unlike opioids, “no stimulant overdose reversal agents or approved medication-based treatments for stimulant use disorder exist”. The same report counted overdose deaths involving cocaine rising from 4,681 in 2011 to 29,449 in 2023.
The pharmacology is old and specific. Cocaine blocks the dopamine transporter, the protein that clears dopamine from the synapse. Modafinil, a prescription wake promoting drug approved for narcolepsy, blocks the same transporter but binds it in a different conformation and has shown low abuse potential. Early trials suggested modafinil reduced cocaine intake; larger multicenter trials found only modest advantage over placebo, and modafinil binds the transporter weakly and dissolves poorly.
So chemists in Amy Hauck Newman's laboratory at the NIDA Intramural Research Program built analogs of it. Two became the test pair for the whole hypothesis. JJC8-088 behaved like cocaine in animals and was self administered. JJC8-091 was not self administered, did not substitute for cocaine, and reduced the motivation to work for it. A 2019 paper in Neuropsychopharmacology from Newman's group called it “a compelling candidate for development”.
Four graduate students and a competition
In September 2014, four Wake Forest graduate students entered the Neuro Startup Challenge, an NIH competition in which university teams write business plans for inventions the government owns. Omeed Rahimi, Ayana Martin, Bradley Keegan and Aaron Lazarus were finalists. Three advisors, Robert Anderson, Peter Sheldrake and Jessica Beaver, formed the first board.
Lazarus finished a biology degree in 2014 and a one year management masters in 2015, then became chief executive. The scientific weight came from Steven R. Childers, a professor emeritus who had spent four decades on drug abuse pharmacology and half of them directing the Drug Abuse Center at Wake Forest. He joined as chief research officer and became the named principal investigator on every NIH award the company received. The stated plan was never to sell a drug, but to carry a compound far enough that a pharmaceutical company would take it the rest of the way.
The license, and what it asked for
NIH published a notice of intent to grant an exclusive license in December 2015, and the company reported taking it in January 2016. The patent family covers modafinil analogs invented at NIDA, with Newman and Jianjing Cao among the inventors. In October 2017 the Federal Register widened the licensed field of use with a condition attached: the modification “requires EncepHeal to select a lead compound for each of the disorders listed in the Field of Use”, after which the rest of the library would open to other licensees.
Federal money followed. A NIDA SBIR Phase I award of $304,217 arrived on April 19, 2017, with supplements of $50,000 in 2018 and $99,999 in 2019. North Carolina added a $65,000 state matching grant in May 2017 and a $150,000 award from the North Carolina Biotechnology Center that October. The company joined Y Combinator's Summer 2019 batch.
The grant that was supposed to finish the job
On June 26, 2020, NIH awarded a Blueprint Neurotherapeutics Network project, $339,620 obligated, administered by NINDS with NIDA as funding institute. NCBiotech and WRAL TechWire reported it as a grant with a potential value of $3.3 million over four years, which is how Blueprint works: a small direct award plus access to government contractors for chemistry, manufacturing and safety work.
The project abstract is candid in a way press releases rarely are. Phase I had already picked JJC8-091, then found the problem: the compound's “low bioavailability and potential cardiac safety issues makes it problematic as a lead development candidate”. The project was scoped to fix that, building a fresh structure activity series around cardiac and metabolism liabilities and moving a survivor toward an investigational new drug application.
The award record ends there. NIH RePORTER shows the project running to December 31, 2021, and no further award to the company in any year.
What is proven, and what is still claimed
| Evidence | What the record shows | Source type |
|---|---|---|
| NIH patent license | Exclusive license L-226-2017 to NIDA modafinil analogs. Federal Register notices Dec 2015 and Oct 2017; the second widened the field of use and required a lead compound per indication. | Public record |
| Federal awards | Four NIH awards totaling $793,836: U43 DA043285 Phase I $304,217 (Apr 2017) plus supplements of $50,000 and $99,999, then U44 NS116931 $339,620 (Jun 2020). Principal investigator on all four: Steven R. Childers. | Public record |
| Lead compound status | The 2020 Blueprint abstract names JJC8-091 as the Phase I candidate and states its bioavailability and cardiac safety make it problematic as a lead. The project was scoped to build a new series, not to advance JJC8-091. | Public record |
| Primate result | Rahimi et al., Mar 2023. In rhesus monkeys, “JJC8-091 only modestly reduced cocaine allocation in one monkey”. Its affinity for monkey striatal transporter measured about ten times weaker than in rat tissue, which the authors offer to explain the poor translation. | Peer reviewed |
| Company claim on abuse liability | The company summary says “we have shown that these new, allosteric modulators at the dopamine transporter do not display addictive tendencies in animal models”. That holds in rodents. The claim that they curb cocaine addiction is where the primate data diverge. | Differs from the record |
| Announced versus obligated funding | Announced in 2020 as up to $3.3 million over four years. NIH RePORTER records one award of $339,620 and a project end date of Dec 31, 2021. | Differs from the record |
| Clinical stage | No trial registered on ClinicalTrials.gov, no IND disclosed, no FDA record. Nothing reached a human participant. | Not found |
| Publication output | One PubMed indexed paper with company authors, the 2023 monkey study. Nothing later under the company name. | Not found |
| Current operations | The website was serving a hosting suspension page by December 2022, and captures from 2024 on show the domain carrying unrelated commercial content. The Y Combinator founder bio reads “I am the former founder and CEO of EncepHeal Therapeutics, developing medications for substance abuse.” | No activity found |
Read plainly: EncepHeal did the unglamorous part of drug discovery correctly. It won a federal license on merit, put a serious pharmacologist in charge, raised close to a million dollars without selling recorded equity, and ran the primate experiment most seed stage companies skip. What it found was that the candidate did not carry across species. That result is published under the company’s own name, and it is also the point at which the money stopped.
What to watch
- Whether NIH license L-226-2017 is reassigned or terminated, which would show in a Federal Register notice.
- Any new NIH award under the company name. The last award notice was June 26, 2020.
- Whether the NIDA series advances with other sponsors. In December 2025 the NIDA Intramural Research Program featured a newer atypical transporter inhibitor, RDS-04-010.
- Any registered trial of an atypical dopamine transporter inhibitor for stimulant use disorder, from any sponsor. That is the threshold the hypothesis has yet to cross.
In their words
“I am 24 years old. I'm the age where it's not likely that I would go into a startup. But, that shouldn't stop anyone.”
Aaron Lazarus, co-founder and CEO, 88.5 WFDD, 2016 · Interview
“But we stumbled upon a potential solution to the problem of addiction that can help millions of people.”
Aaron Lazarus, on the Neuro Startup Challenge, Innovation Quarter · Independent
“The main attraction for me is to combine my years of scientific expertise with the energy and passion that these young entrepreneurs bring to an area that represents a critical health problem in the U.S.”
Steven Childers, chief research officer, Innovation Quarter · Independent
“Investors see our young faces leading the company, and it makes them nervous.”
Ayana Martin, chief business development officer, Innovation Quarter · Independent
“We are thankful to have the support of the Blueprint Program, as well as the continued support of NIDA.”
Aaron Lazarus, NCBiotech and WRAL TechWire, Jul 28, 2020 · Independent
Related companies
Sources
- Public recordNIH RePORTER award records, four projects
- Public recordProspective Modification of Exclusive Patent License, 82 FR 45865
- Peer reviewedJJC8-088 and JJC8-091 on Cocaine versus Food Choice in Rhesus Monkeys
- Public recordDrug Overdose Deaths Involving Stimulants, United States
- Public recordRDS-04-010 featured paper
- Public recordSEC EDGAR searches for EncepHeal, no filings returned
- Public recordCapture history for encepheal.com
- IndependentNC's EncepHeal Lands NIH Grant to Treat Cocaine Addiction
- IndependentEncepHeal: A Start-up Gets Its Start in the Innovation Quarter
- InterviewMedical Cocaine Addiction Treatment Being Developed by Winston-Salem Entrepreneur
- CompanyCompany page and founder bio
- CompanyEncepHeal website: home, about, products, team, press
Profile researched and written by Healthcare Discovery. Last updated September 29, 2026.
